Coats Viyella delighted the City last week with plans to sell its precision engineering business Dynacast to a management team for a better-than-expected £322m.
Chief executive Dr David Spiers is leading the buy-out with backing from venture capital group Cinven. Other members of the management team include finance director Jim McLean.
The sale had been on the cards for some time last December the company appointed JP Morgan to look at sale options for the company.
Warwick-based Dynacast employs 6,000 people at 37 plants in 19 countries. Last year, it made a pre-exceptional profit of £35.4m on turnover of £319m. It accounted for about a quarter of the Coats Viyella group’s profits.
Dynacast supplies the automotive, telecoms and computer sectors in Europe, Asia and the US. Its products include Gillette Mach 3 razor handles and parts for Black & Decker.
It has two main divisions: diecasting and precision plastics. The former accounts for about 60% of the company’s turnover.
Spiers, who joined Dynacast from BTR in 1991, said it was too early to talk about future plans. But he rejected the suggestion that Dynacast lacks capital investment following Coats Viyella’s fall out of the FTSE 100.
‘That is utterly untrue,’ he said. ‘During the past five years the rate of investment in the company has been double that of the UK engineering industry.’
Coats Viyella said proceeds from the deal, which still needs shareholder approval, will be used to pay off debt.